How to Pay Off Holiday Debt

Did you overspend during the holiday season? You aren’t alone. Americans planned on spending an average of $997.79 on gifts, holiday items, and non-gift purchases in 2020, according to a survey by the National Retail Federation.

Holiday debt can impact your budget for years, so if you went a little overboard on your holiday spending you’ll want to pay it off once and for all. At People’s Community Federal Credit Union, we want you to start the year financially strong so we’re sharing some smart tactics to help pay off holiday debt.

Add Up Your Debts

Spend some time adding up all of your credit card balances and other debts, as well as each account’s interest rate. Having a better understanding of where you are with your debt will make it easier to choose a payoff plan.

Select a Payment Strategy

Now that you know exactly how much you owe, you’ll want to figure out how you’ll pay off your debt. When it comes to payoff strategies, there are two main types.

The avalanche method: prioritizing repayment from the highest interest rate to the lowest interest rate.
The snowball method: making the minimum payment on each account, then allocating any remaining funds toward the debt with the smallest balance amount.

Stop Unnecessary Spending

Impulse purchases will only lead to more debt. Change your spending habits now to avoid digging yourself deeper into debt.

Consolidate with a Balance Transfer Card

One way to consolidate holiday debt is to complete a balance transfer. With a People’s Visa® Credit Card, you will have a 1.90 APR* for the first year. This low APR will help you pay off your balance faster than a credit card with a high rate. Because the 1.90% APR* is only temporary, you’ll want to pay off your debt before the introductory period ends.

*Full disclosure regarding introductory rate.

Consolidate Debt with a Personal Loan

If you have a large amount of debt and don’t want to open another credit card, a personal loan is another option to consolidate your debt. Personal loans come with fixed repayment options, giving you plenty of time to pay off debt. At People’s, we offer personal loans to make bill consolidation easy. Apply online now!

Talk with a Credit Counselor

It’s understandable why many people go overboard with their holiday spending, but this doesn’t have to be you. Just start saving now and shop early. You’ll strengthen your credit score and eliminate debt and stress later. For low-cost loans, convenient checking accounts, savings accounts, and more, set up an appointment with People’s Community Federal Credit Union where you’re treated like a valued member instead of just another customer.

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